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As Congress and the White House continue to work toward solutions to help embattled homeowners, home foreclosure filings took a big jump in the third quarter, according to the latest data from real estate Web site RealtyTrac.

Foreclosure actions were reported on more than 446,000 properties the three months ended Sept. 30, up 30 percent from the second quarter and double last year’s third quarter. That brings the overall foreclosure rate to one in every 196 U.S. households.

The rise in foreclosures was widespread, with 45 out of the 50 states reporting higher levels than last year. But the highest concentrations were a handful of housing markets; California Arizona, Florida, Nevada, Ohio, Texas and Michigan made up more than half of the total.

The rise in foreclosures comes as millions of homeowners face sharp increases in their mortgage payments from low “teaser” rates as the housing market remains mired in a slump.

Home prices in 10 markets tracked by the S&P/Case-Shiller housing index slid 5 percent in August, the eighth straight monthly drop, according to figures released Tuesday. Some economists expect home prices to fall by 10 percent before the market finds a bottom sometime late next year, barring a further economic downturn. The pullback follows one of the strongest housing booms on record that sent median prices up more than 50 percent earlier in the decade.

Video: Foreclosures number soar
Because the low initial rates on many mortgages typically last for two or three years, the housing market faces further pressure next year from loans that were written when the housing market was still rising and lenders were offering easy terms to borrowers with less-than-stellar credit.

“Given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets,” said James J. Saccacio, chief executive officer of RealtyTrac

In Nevada, there was one foreclosure filing for every 61 households, the highest rate in the nation. That’s up 23 percent from the previous quarter and more than triple the number reported in the third quarter of 2006.

California saw one filing for every 88 households, the second highest; the rate was up 36 percent from the previous quarter and nearly quadruple the third quarter of 2006.

Florida’s foreclosure rate, the nation’s third highest, rose from a year ago to one filing for every 95 households, an increase of more than 50 percent from the previous quarter.

Other states with foreclosure rates among the top 10 included Michigan, Ohio, Colorado, Arizona, Georgia, Indiana and Texas.

Though widely followed since the housing market began slumping a year ago, RealtyTrac has only been issuing reports on foreclosure data for two years. Some critics of the reporting have said that it may overstate the problem because it counts filings at various stages of the default and foreclosure process. The company says that beginning this year, it has begun publishing data that counts a property once, even if there were multiple foreclosure actions filed on the property.

With foreclosures rising, federal state and local officials are looking for ways to try to head off the process that will keep people in their homes, avoid adding more unsold inventory to the housing market and save lenders the legal expenses and losses they typically incur foreclosing on home in a falling market.

Homeowners at risk of default are being urged to contact their lenders and try to work out alternatives. But many of those who do so confront a dense thicket of lending regulations and other red tape. During the first nine months of the year, only 1 percent of subprime home loans at risk were rewritten, according to Moody's Investors Service.

Earlier this month, Treasury Secretary Hank Paulson said an industry coalition was working to help homeowners head off foreclosures and keep their homes. Paulson said the plan was for the government to coordinate efforts by lenders to help rework loans for borrowers in trouble and head off default. Paulson said 11 of the largest mortgage service companies, which together handle 60 percent of all mortgages in the country, had agreed to join the new coalition. Other members will include mortgage counseling agencies, investors and large trade organizations.

One proposal would be to simply freeze the introductory rates for homeowners who are still current on their mortgages to help them avoid defaulting when their monthly payments jump.

On Tuesday, the House Judiciary Committee heard testimony on a proposal to make changes to the U.S. bankruptcy code that could help stem the rising tide of mortgage defaults. Among the proposals is a provision that would give bankruptcy judges greater leeway to restructure debts for people unable to meet sharp increases in monthly payments. Under current law, judges have the authority to modify other types of borrowing, including credit cards or car loans.

"Residential mortgage loan defaults and foreclosures are surging and without significant policy changes will continue to do so through 2008 and into 2009," said Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pennsylvania, who broadly endorsed the plan.

Two million homeowners will have their property seized between this year and next, Zandi said, and the bankruptcy reform plan is needed to confront that crisis.

"You either do this sooner or you do it later," said William Brewer, Jr., a North Carolina bankruptcy lawyer. "If I am right, you will come back here next spring and this fire I am talking about will be burning out of control."

The proposal, backed by consumer groups but opposed by the lending industry, would give bankruptcy judges new authority to modify mortgage terms for homeowners deemed to be insolvent. It would let bankruptcy judges extend the life of a home loan, change the interest rate or simply mark down the loan amount.

Opponents of the changes say giving judges the power to alter loan terms could make it harder for new borrowers to find loans. The proposal would also force mortgage lenders to raise their rates in order to cover the additional risk of a bankruptcy judge scratching the terms of a loan, according to David Kittle, chairman-elect of the Mortgage Bankers Association.